South African bonds were slightly firmer on Friday before midday as the market made sense of the Reserve Bank’s surprise interest-rate cut. The Bank cut the repurchase rate by 25 basis points to 6.75% on Thursday, surprising economists and analysts who had expected they would be kept on hold, despite easing inflation. Rand Merchant Bank analyst Gordon Kerr said, "We know that any cutting cycle will not be too deep and so, cheaper funding rates shouldn’t be a massive support for our bonds." He said the local market remained subject to the global environment, with particular focus on the US Federal Reserve’s open market committee meeting, which is coming up next week. At 11.31am, the R186 was bid at 8.49% from Thursday’s 8.545% and the R207 at 7.28% from 7.335%
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